Opioid Deal Finalized But Victims Get Squat!

Say you're the CEO of a heroin importation and wholesale distributorship company named Junk, Smack, & White Horse Inc. Life is good. 

You have begun vertical integration with overseas suppliers and some smaller dealers, bringing them into your conglomerate. 

You still have large competitors (those disrespectful muyerfuyer SOBs at Mexican Brown & China White LLC are testing your patience) but at least when police crackdowns occur you're not the only target.  

You face the minor irritations of customers dying, prostituting themselves, robbing others to pay for your product, becoming homeless, abusing their loved ones, and becoming unproductive junkies, but as any cook will attest, you can't make an omelet without breaking some eggs. Anyway, your customers don't live in your neighborhood. Your bank account, stock portfolio, homes, yachts, cars, children's private schools, and wife's dresses and jewelry let you know it's all worth it. 

Range Rover Evoque Commercial: Stolen Music???

I am not a musician or an entertainment lawyer so I can't say with absolute authority that the song "I found a place in my heart" from the new Range Rover Evoque commercial was stolen from the song "Every Beat of My Heart" as originally written by Greek-American musician and honorary Black man Johnny Otis and later covered by James Brown and most memorably, in my opinion, by Gladys Knight and the Pips. I can't say with 100% certitude that some one sat down, listened to someone else's music, stole the melody and rhythm and verbal phrases and tics and altered the lyrics just enough to avoid lawsuits from all but the richest or most protective of estates.

I can say that if there were ever a lawsuit by the Otis estate (or by whoever owns the rights to the song) against the person who claims to have written this song the defendant probably wouldn't want me on the jury. At all. Because all I would be asking the judge is can we convict the thief now. Or to put it another way, I despise plagiarists. But maybe I'm all wet. Listen to both songs below and share your thoughts.

GM Lordstown Plant Closing

When people are discouraged, prevented and/or excluded from serving in positions of power they often show an intense, even obsessive, interest in putting one of their own in the Big Seat, however it is defined. And the people who have one of their own in the Big Seat, often show an intense, even obsessive, interest in keeping that spot, even if they receive little to no material benefit from having one of "theirs" in the top spot. This is just human nature. I don't think it will ever truly change. 

However it continues to be worthwhile to point out over and over again that simply putting a black face in a high place or putting someone in charge who can wear skirts and heels instead of pants without changing the power structure and the nature of the economic relationship is ultimately not worthwhile-at least not worthwhile for anyone except the individual who is making the big money in the top spot. Mary Barra is the Chairman (Chairwoman?) and CEO of GM. 

She is also the first woman to hold that position at GM and any other global automaker. When she ascended to the spot this was heralded as a good thing for women executives, women employees, women in general and the nation in general. Barra makes $21 million/yr in salary. I am sure she has the stock options, deferred compensation, retirement plans, bonus incentives and all of the other benefits that any  major league executive in her position would receive.

Barra also oversaw the recent announced closing of the GM plant in Lordstown, Ohio. This will devastate that community and increase the problems of opiate addiction, homelessness, economic inequality, job loss and other issues that plague American workers. The union contract GM signed apparently both forbade closing the planet and/or required additional worker benefits if the plant was closed.

Handouts for Billionaires: Dan Gilbert's $600 Million Deal

Some people make a strong argument for government intervention, whether in the form of tax breaks, incentives, subsidies, or outright cash transfers to help poor or middle class people get on their feet, get job training, start a business, get an education, buy a house or (ahem) get some health care. 

The devil is in the details of course but if you're living paycheck to paycheck and/or can't immediately put your hands on $1 million in cash, then I won't begrudge you some form of government assistance. There but for the grace of God go I and yada yada yada. If you are a rich person with regards to income or more importantly in regards to wealth (the top 1% households had a little over $10 million in net worth in 2016) then I will suggest that you don't need much assistance from any level of government. You likely work for yourself but even if you don't it's rare that the loss of your job will have you sweating and panicking over a missed paycheck in two weeks. There are some people for whom $10 million is nothing special. They might drop that much on weekend gambling ventures, jewelry for their wives or mistresses, rare cars, vacation homes or child support.

A billion is one thousand million. That's ONE THOUSAND MILLION. If you are worth one billion then you or yours don't want for much. Dan Gilbert owns Quicken Loans, Rock Financial, a few casinos and of course the Cleveland Cavaliers. Dan Gilbert is Michigan's richest resident, and likely Ohio's as well when he's in that state. In 2017 Gilbert was number 91 on the Forbes 400 list. Only a few Americans have more money than Gilbert. Dan Gilbert's net worth is approximately 6.3 Billion dollars or to put it another way, 6300 million. There's little that Gilbert couldn't buy or invest in if he so chose. Money is not a limiting factor for Gilbert. So I'm having trouble understanding why the State of Michigan has decided to give a $600 million subsidy to Gilbert for a real estate deal.

Dan Gilbert, the billionaire who has overhauled downtown Detroit by resurrecting historic buildings, sealed one of his biggest Motor City deals yet by getting final approval Tuesday for a $618 million tax incentive plan.

I'm Off The Clock!!!!

I previously wrote this post about among other things, how this movie scene resonated with me. I work in a financial sector of the IT arena. Way back in the day I was part of the on call rotation for an accounting system. If anything went wrong with the system after hours your pager would go off. If you didn't respond in a timely manner then you'd get a phone call. 

If the production support person hadn't heard from you in fifteen minutes they would contact the backup on call person and/or your boss. One big problem I had with this entire initiative was that initially our team didn't have the budget to fix the processes that were most likely to cause problems. Because our portfolio of responsibilities was huge, usually when someone was on call he or she would only know his or her given area of expertise. So when a particular accounting update process went bad the person on call might only know the reporting piece. 

So s/he would end up calling the accounting update specialist, who wasn't on call and wasn't going to be happy to be contacted at 2:30 AM. The most critical jobs always ran late at night. Eventually, via cross training and a boss that obtained enough funds to code fixes and upgrade databases, we reduced the frequency and intensity of problems. But it still was unpleasant to be on call. We were on salary so we didn't get any extra money if we had to tune a database or restart a reporting job at 2 AM. Perhaps if the company had to pay us more to be on call our previous boss would have pulled her head from her posterior and taken earlier steps to solve issues. I was reminded of all this history because in New York City there is a proposal to restrict the ability of employers to require workers to do work or answer emails from home after business hours.

Corporate Tax Deductions for Settlements, Fines and Damages

When you do something wrong and are punished for it by having money taken from you the purpose of that little exercise is to convince you not to break the law or violate the rules again. The size of the fine may vary depending on how serious the offense is, whether the person who is being fined is a first time offender, how much money the person who is being fined has, whether or not the person or institution levying the fine is in a bad mood that day or is looking to make an public example of some schmuck or a million other reasons. But the purpose of the fine remains the same regardless of whether you are an NFL player who doesn't like to talk to the media, an NBA player who publicly questions the integrity of the league or its referees, or a taxpayer who simply doesn't like paying his taxes when the city, state or country says that he must. For example, in my younger days (i.e four years ago) I used to consider posted speed limits on expressways as something more akin to suggestions than hard and fast rules. I certainly wasn't the only motorist inclined to do this. On some local expressways if you aren't doing at least 80 mph you just aren't trying. However, four years ago a friendly police officer stopped me to let me know that no, he for one really did take those speed limits seriously. He thought I should as well. To assist me in reaching this future goal he wrote out a ticket that had a fine which I found to be entirely too high. Well I suppose it had the desired effect. I got a radar detector and kept a closer lookout for cops. Most days I rarely drive more than 3-4 mph over the posted speed limit. I simply don't have the money to give away to a podunk municipality over nonsense like that.
But imagine if instead of having to pay the entire fine myself and wreak havoc in my monthly budget I could come to you and force you to pay a significant portion of that fine. You might protest that you weren't the big dummy who was driving significantly over the speed limit. I would respond with something along the lines of how we were all in this together. I would help you out if it came to it. So suck it up buttercup and hand over some cash. If you were forced to pay part of my penalty not only would you be upset (something I wouldn't care about that much to be honest) but more importantly the fine wouldn't be enough to deter my future behavior. Because the net fine to me would then be much lower I would be less likely to be deterred from speeding. That would be a really good deal for me. It might not be such a great deal for you or for the rest of society. The person who incurred the cost and broke the law/rules is not the one who is paying the cost.

When a Montana judge ordered Hyundai to pay $73 million in punitive damages last year to the families of two teenagers killed in a car crash, she found that the South Korean automaker had “recklessly” ignored scores of warnings over more than a decade about the steering defect blamed for the accident. But even if Hyundai is eventually forced to pay the full amount of the damages, the punishment could be substantially reduced through a tax loophole that permits the company to save millions of dollars by deducting any court-ordered punitive damages as an ordinary business expense. The result, critics say, is that taxpayers are in effect subsidizing corporate misconduct. 

Carmakers are far from the only companies that can exploit loopholes that allow them to lower their tax bill by deducting fines, forfeitures and other payments related to wrongdoing. Although the tax law forbids deductions for criminal fines and penalties owed to the government, other kinds of payments — to compensate victims or correct damages — are eligible for a tax deduction.  The rating agency Standard & Poor’s, which was accused of helping to cause the financial crisis with its inflated assessments of mortgage investments, is eligible to deduct half of the $1.37 billion settlement with state and federal prosecutors it agreed to this week, according to the U.S. Public Interest Research Group, a consumer-oriented nonprofit. The result would be a roughly $245 million reduction in its tax bill, the research group calculated.  

At least 80 percent of the more than $42 billion that BP has paid out because of the 2010 Deepwater Horizon rig explosion that killed 11 people and spewed oil into the Gulf of Mexico qualifies for a tax deduction, according to U.S. PIRG. That has saved an estimated $10 billion to $14 billion for the company. The exact amount is uncertain because of the lack of transparency, the group complained.  Brandon Garrett, a law professor at the University of Virginia and author of “Too Big to Jail,” said that BP was “asking taxpayers, in effect, to pay for the victim compensation fund it agreed to set up.”
LINK

So this is an incredibly good deal for companies which have to pay for wrongdoing. Not only do the company officers and owners generally avoid personal damages and/or prison time for misdeeds they even are able to avoid the full impact of the fine by getting the government (i.e. you) to help pay for it. Often they can get the fine or settlement reduced on appeal. It might not be such a great deal for you or for the rest of society. The person who incurred the cost and broke the law/rules is not the one who is paying the cost. That seems to violate basic fairness. This is another example of how our tax code and public perception of welfare leeches. This is why as we recently discussed one has to be careful when one reads about this or that inner-city ghetto or poor trailer park person "cheating" the system out of a few hundred dollars each month. Your disgust or contempt should be saved for the big dog who's crapping on the floor, not the little puppy. Corporations are cheating the government out of BILLIONS. Technically I shouldn't even use the term "cheating" as this is all quite legal. Moral outrage doesn't trump law. The fact that these tax code provisions are still in place proves the amount of power that corporations and their armies of lobbyists and attorneys can bring to bear. A great many of these mega corporations don't pay many, if any income taxes in the first place so this is just par for the course. Until enough people get angry enough to demand changes, these policies will continue. But to demand change you have to know what's going on behind closed doors and out in the open. This is why it's so important to read, inform yourself and get politically active.

President Obama Sells Out Workers

We all are hypocrites in one way or the other. It's just part of being human. Nobody is consistent across the board on everything. However I am amazed by the fact that the Obama Administration has managed to maintain so much support from labor and many members of the working class when it continues to display that it is not necessarily a big friend of the working class. Its rhetoric doesn't match its actions. One of the critical employee rights which we are supposed to have in this country, whether we are union or non-union, white collar or blue collar, is that if you work for someone else you should be paid for the time you're at work and the tasks you complete. There are a few marginal exceptions to this. The exempt professional worker usually does not automatically get time and a half overtime pay for more than 40 hours of work per week. Such pay might be made but it's much more likely to be compensated (if at all) in additional time off at some later date. Possibly. Maybe. It depends on your company's policy and boss's needs. Obviously in some professions, working 40 hours per week is considered slacking. You don't become partner at a law firm, trading boss at a hedge fund, or head surgeon at the hospital by only working 40 hrs each week. The flip side of that though is that if a salaried professional leaves early one day because they're sick or have a family emergency or just want to see a playoff baseball game, their next paycheck probably won't include a line item for pay docked. So in theory it balances out.

Still whether professional or not, if the company says you must do X as part of your job duties chances are you will do X as part of your job duties, if you want to continue getting paid. And getting paid is the key thing here. The company shouldn't be able to obtain work or time from you for free. Of course companies are amoral and increasingly want to do just that. And for some strange reason the Obama Administration is siding with the companies.
After his 12-hour shifts at an Amazon warehouse in Las Vegas, Jesse Busk says, he and 200 other workers typically waited in line for 25 minutes to undergo a security check to see whether they had stolen any goods. Upset that the temp agency that employed him refused to pay workers for that time, Mr. Busk sued. On Wednesday, the Supreme Court will hear oral arguments about this hotly contested issue. The nation’s retailers are paying close attention because such security checks are common. The Supreme Court is to determine whether the check and related waiting time were part of Mr. Busk’s regular, compensable workday or, as the temp agency argues, were time after his workday and not compensable.

In its brief, the temp agency, Integrity Staffing Solutions, argues that the security check and the related waiting time are part of the “preliminary” or “postliminary” activities that are not compensable under the Portal-to-Portal Act, which Congress passed in 1947.  Mr. Busk’s lawyer, Mark R. Thierman, disagreed. “The antitheft check is integral and indispensable because the company said you have to do it,” he said. “If the company tells you to do it, it doesn’t matter whether it’s related to what else you do on the job.” The Obama administration has filed a brief backing Integrity Staffing. 

Some pro-labor groups voiced surprise that the administration was backing Integrity Staffing. “The administration says it’s time to put more money in the pockets of workers who work long hours with low pay,” said Catherine Ruckelshaus, general counsel for the National Employment Law Project, an advocacy group for workers. “Their position in this case is contrary to what they’ve been saying.”

LINK

Ok. Let me get this straight. The company pays its workers chump change and then is concerned that some of the workers will make up the difference by "liberating" some company merchandise for resale. It's a reasonable worry. The company could address this problem by raising everyone's pay so that getting busted for stealing some crap from a warehouse wouldn't be worth anyone's trouble. Unrealistic I know. Well. What to do then? Ooh! Ohh! I know! I know!! The company could maintain its security procedures, demeaning and insulting though they are, and PAY the workers for the extra time that they are spending at work being shaken down for possible stolen goods. This search is part of their job. Mr. Busk could not say "No, I'm not going through those searches tonight" and reasonably expect to have a job the next morning. This is not something that was externally imposed by the municipal, federal or state government where the company and/or the subcontractor could argue that they had no responsibility. And no this is not something where the Obama Administration is being forced by those "wascally Rethuglicans" to do something which is against its better nature. The Obama Administration, in the form of the Labor and Justice Department, is siding with the U.S Chamber of Commerce, the Retail Litigation Center and several other pro-business anti-labor groups. If the President didn't want this he could use his celebrated pen and phone to tell Labor Secretary Perez and Attorney General Holder to withdraw Administration support from the company's side of this dispute. This really is a watershed moment. As much as anything else this tells you which side the Obama Administration is on when it comes to conflicts between capital and labor. Hint, not labor's.

As mentioned, under the logic being pushed by Integrity Staffing Solutions and the Obama Administration, a company could order an employee to do ANYTHING after or even during his shift and then refuse to pay the employee by claiming that the task was not integral to work. So a boss could theoretically order someone to go pick up his dry cleaning and then refuse to pay because after all, retrieving your supervisor's laundry is not really a key task. But if you don't you're fired. Right. If the Supreme Court sides with the company you will see many corporations transfer more and more unpaid tasks to workers under the fallacious idea that these tasks aren't integral. Worker income will continue to stagnate or fall. Corporate profits will continue to rise. Under the current Supreme Court who can predict what can happen. But I will bet that Scalia and Thomas will side with the company and with President Obama. 

What do you think the right thing to do here is?

Why has President Obama sided with the company?

Have you ever been in a situation where your employer tried to extract unpaid work?

Pay your auto loan or don't drive!!!

I generally think that if you take out a loan you should adhere to the legally enforceable terms of the contact. So if you agree to pay X dollars back per month then you really should pay X dollars back per month. It irritates me when people borrow money from me and find all sorts of creative reasons why they should not pay it back. I think this is true regardless of financial status. Pay what you owe. A deal is a deal. That said, depending on what the loan or service was, the creditor can encounter difficulty getting repayment. The Federal government and to a lesser extent state governments have fewer problems getting money owed from you as they have the power to just TAKE money from your account, seize your assets, tell your employer or bank to stop giving you money and put you in prison. That will get your attention. Utility providers can shutoff service for non payment. Customers notice that. Loan officers operating outside the law can send unpleasant people to your home or workplace to threaten physical harm if they don't immediately receive payment. Getting your shins cracked with a baseball bat or having your hands broken can provide financial clarity. Some other creditors, say lenders on auto loans, don't have the ability to immediately and seamlessly compel payment. They loaned money on a quickly depreciating asset. Many people don't give car loans priority over housing or food costs. The debtor can easily move his car to another state. To repossess the asset, depending on state law, the creditor usually has to go to court to obtain a judgment before hiring some semi-reputable people to retrieve the vehicle. This could all be messy and costly. In some zip codes if someone hears or sees someone breaking into their car, they will shoot first and ask questions later. So what's a creditor to do?

Well imagine if instead of having to go through the hassle of sending out multiple dunning letters, taking people to court and spending money on repo men, a creditor could ensure that the debtor was interested in, even eager to pay the creditor on time and in full each and every month for the life of the loan? How would someone do that you ask? Well the creditor would just install a handy dandy gadget which prevents the auto from running if the creditor has not been paid.  

The thermometer showed a 103.5-degree fever, and her 10-year-old’s asthma was flaring up. Mary Bolender, who lives in Las Vegas, needed to get her daughter to an emergency room, but her 2005 Chrysler van would not start. The cause was not a mechanical problem — it was her lender. Ms. Bolender was three days behind on her monthly car payment. Her lender, C.A.G. Acceptance of Mesa, Ariz., remotely activated a device in her car’s dashboard that prevented her car from starting. Before she could get back on the road, she had to pay more than $389, money she did not have that morning in March. 

“I felt absolutely helpless,” said Ms. Bolender, a single mother who stopped working to care for her daughter. It was not the only time this happened: Her car was shut down that March, once in April and again in June. This new technology is bringing auto loans — and Wall Street’s version of Big Brother — into the lives of people with credit scores battered by the financial downturn. Auto loans to borrowers considered subprime, those with credit scores at or below 640, have spiked in the last five years. The jump has been driven in large part by the demand among investors for securities backed by the loans, which offer high returns at a time of low interest rates. Roughly 25 percent of all new auto loans made last year were subprime, and the volume of subprime auto loans reached more than $145 billion in the first three months of this year. 

Last year, Nevada’s Legislature heard testimony from T. Candice Smith, 31, who said she thought she was going to die when her car suddenly shut down, sending her careening across a three-lane Las Vegas highway. “It was horrifying,” she recalled.
Ms. Smith said that her lender, C.A.G. Acceptance, had remotely activated her ignition interruption device.
“It’s a safety hazard for the driver and for all others on the road,” said her lawyer, Sophia A. Medina, with the Legal Aid Center of Southern Nevada.

LINK

This is a good example of how poverty is quite profitable for certain segments of our population. Although these devices are currently only being used on those customers unfortunate enough to be entangled in sketchy subprime loans I would predict it's only a matter of time before usage is expanded to the entire consumer auto loan market. In short you might have a 800 FICO score and be willing to put down 80% of the car's value as a down payment. But a bank might still decide that it can reduce risk by insisting that all of its loans must include shutoff devices. I wouldn't like that. But it's not just enlightened self-interest that would make me oppose these devices. It might be funny from afar if, as described in the article, Joe Sixpack is embarrassed as a deadbeat in front of his lady. It's not so funny when a car shuts off while it's being driven. It's not funny when a car won't start when a police or fire vehicle needs to get in front of it. There's no humor in a a non-working car when someone needs to get to the hospital or there is some other emergency. When I am on the road I try to be as vigilant as possible to protect myself and the lives of others. Part of that protection is a societal interest in ensuring that other drivers are licensed and that their cars work. I don't want to be on the road with other cars that could suddenly shut off. That's an unnecessary risk for us all. The lenders are making unnecessary and dangerous intrusions into our privacy and our safety. I understand their interest in receiving timely payments. But there are other concerns against which those must be balanced. Electronic shutoff devices are a bad idea.

Should electronic shutoff devices be outlawed?

Would you buy a car if your loan included this device as a requirement?

Are these people just examples of poor financial acumen?

Should the Federal government get involved in regulating these devices?

Corporate Welfare or Good Business Sense???

I'll take any mother*****'s money if he giving it away!!!!
-Clay Davis
Regardless of race, gender, political affiliation or geography, when you say "welfare", many people probably still think of a person who looks and sounds like this. Such a wretched individual makes an easy target for people who are tired of other people putting hands in their pocket while having the nerve, the audacity to claim that they are somehow entitled to do so.

However it has never ceased to amaze me that the more you need money the less likely people are to give it to you while the less you need it, the more people break their neck trying to give it to you. I was reminded of that by two separate recent events, one national and one local. If we take our focus off "welfare" as money given to "underclass" mothers and/or other loud obese moochers and expand the term to include well off people, we might be surprised by how much government assistance the rich get, even for doing things they would already do. There have been books written on this. This is a tremendously inefficient use of government resources. And it's unfair. I don't mind paying taxes if those taxes can prevent someone from starving to death or being homeless. I do mind paying taxes when those taxes are given to individuals or companies that are not so troubled.

Michigan billionaires, Mike and Marian Illitch (net worth around $3 billion), owners of Little Caesars, The Detroit Tigers, The Detroit Red Wings, various land development companies and Motor City Casino (under Marian's name for business reasons) have decided that they want a new arena for the Red Wings. The current one, Joe Louis Arena is not quite decrepit but is definitely outdated.

Well in a so-called free market when you want to take a risk and build/buy something new you pony up the dollars and either get the rewards or take the losses. But that's not how things work for billionaires, especially in sports. Despite the fact that tons of evidence exists that public financing of sports arenas rarely brings the ROI that supporters claim it does, the City of Detroit and the State of Michigan have come together to ensure that the Illitches get public land for essentially nothing in order to build their new stadium/entertainment complex. That's how things work, not just in Detroit, but in many cities. The subsidy is bad enough but what made this deal stand out to me was that the Illitches, or rather their company, will keep ALL revenues from the stadium. There will be no sharing with either the state or the city. Additionally Olympia Entertainment will pay no property taxes on the new stadium. Even the building of the stadium itself will be 60% publicly funded. Now does that sound like a win-win deal for the city? 

In one of the largest land transfers in the city’s history, the Detroit City Council agreed Tuesday to hand over 39 parcels of land along the Cass Corridor to transform what was once a blighted, crime-ridden strip near downtown Detroit into a $650-million entertainment venue that will include a new arena for the Detroit Red Wings. The vote authorizes the city to sell the public land for $1 to the Detroit Downtown Development Authority, which will own the arena and lease it for up to 95 years to Olympia Development of Michigan. The company is owned by the Ilitch family, which owns the Red Wings. The essentially free transfer of public land — with an assessed value of about $2.9 million — is the city’s chief contribution to the development.

As proposed, construction of the arena itself would be 58% publicly funded and 42% privately funded. No Detroit general fund dollars would be spent; the state is contributing the bulk of the public investment. Olympia has agreed to pay $11.5 million annually for about 30 years to help pay off the construction bonds. Olympia will own the arena’s naming rights and will keep all revenues from arena operations, including parking fees and concessions sales. The city will not collect property taxes on the arena.

The second instance of corporate welfare which caught my ire was the agreement over the latest farm bill, which President Obama is going to sign into law today, likely at Michigan State University, that center of agricultural higher learning better known as Moo U. I hear that the President will also be treated to a demonstration of the correct techniques of cow artificial insemination and 101 uses of cowpies. But I digress. The bill, soon to become law, has all sorts of goodies included into it, most of which are going to insurers and agribusiness, not "farmers". Think less Tom Joad and more Monsanto.

The bill stinks. And given that it also cuts food stamps can Democratic partisans stop talking about how the evil Republicans are behind this. If the food stamp cuts really bothered the President he would veto the bill. He's not doing that. Take from that what you will. I learn from people's actions, not their words.

WASHINGTON — No one was happier than Danny Murphy, a Mississippi soybean farmer with 1,500 acres, when the Senate on Tuesday passed a farm bill that expanded crop insurance and other benefits for agribusiness. “It’s a relief,” Mr. Murphy said. Few were as unhappy as Sheena Wright, the president of the United Way in New York, who expects to see a surge of hungry people seeking help because the bill cuts $8 billion in food stamps over a decade. “You are going to have to make a decision on what you are going to do, buy food or pay rent,” Ms. Wright said.

The nearly 1,000-page bill, which President Obama is to sign at Michigan State University on Friday, among other things expanded crop insurance for farmers by $7 billion over a decade and created new subsidies for rice and peanut growers that would kick in when prices drop. But anti-hunger advocates said the bill would harm 850,000 American households, about 1.7 million people spread across 15 states, which would lose an average of $90 per month in benefits because of the cuts in the food stamp program.

Unlike the food stamp program, the federally subsidized crop insurance program was not cut. The program, which is administered by 18 companies that are paid $1.4 billion annually by the government to sell policies to farmers, pays 62 percent of farmers’ premiums.

LINK

So the rich will get richer and piggish private interests will continue to feed from the government trough, only pausing long enough to wipe the crumbs from their snout and mumble "free market" or "individual responsibility" to the rest of us, before continuing their gluttony. Such is life I guess. I would like to know though where is the conservative outrage over such transfers of public monies to private hands? Why are some conservatives silent about this when businesses are the recipients? And flipping the script would liberals be quiet if it were a President Bush cutting food stamps in the economic environment we have now? Somehow I doubt it. But look over there! Chris Christie!!! Benghazi!! Birth Control Pills!!!!!!

Michigan: Right to Work State?

My home state of Michigan is in many ways ground zero of the modern industrial labor union movement. Even as unions have lost ground nationwide and been all but outlawed in the South, unions in Michigan have persevered even though they have but a shadow of their former strength and militancy. Roughly 18% of Michigan workers belong to a union. In some respects the union movement is on life support. But if there's one thing the Republican establishment agrees on it's dislike of unions. So the Republican dominated House and Senate passed bills that would establish Michigan as a "right to work" state. Michigan governor Rick Snyder, who had previously cast himself as a moderate technocrat and said that he thought such legislation was divisive and not very useful to the Michigan population, has done a 180 and said that he could sign the measures into law as early as today.

So what brought us to this point? Well a lot of different things actually. You can't just point to one item. There has always been a struggle between labor and capital simply because the interests are different. If capital could go back to the bad old days of the 1920s or before when they had no unions, compliant politicians, non-existent worker protections and virtual immunity from legal consequences they would do so. If labor could get back to the 1950s when they had strong large popular unions they would do that as well. But the proximate cause of this fight is strangely enough not something in Michigan at all. Michigan unions, and their supporters, deeply worried about labor rights in the wake of Wisconsin governor Scott Walker's successful trimming of labor protections in his state, backed an amendment to Michigan's Constitution. This Proposal 2 would have enshrined labor rights in the Constitution by guaranteeing public and private sector employees the right to organize and collectively bargain for wages and benefits. This was decisively rejected at the polls.

Well as the saying goes, elections have consequences and payback is a muyerfuyer. Republicans saw the Proposal 2 amendment failure as a shot across their bow that had to be responded to, proof of union weakness or as the excuse they needed to implement long desired ideas. So that's how we arrived at this point. Republicans are in the majority. Majority writes the rules. It's been called a lame duck majority because when the new members arrive in the next session there won't be quite as many Republicans and/or possibly not even the support for "right to work" legislation. But just as Scott Brown's election didn't stop the PPACA, Republicans similarly intend to work with the numbers they have while they have them. Ironically Scott Walker says he has no interest in "right to work" legislation.

So what is "right to work" legislation? It's quite simple. It plays on people's financial incentives and uses the free rider problem to destroy unions. When a union is established in a given arena it has to represent everyone in that workplace, whether they joined the union or not. It can't restrict higher wages and better benefits only to union workers. It can't force union membership.It would be a good thing if the union could restrict better wages to those who joined the union but that's against the law. Certainly no employer would ever go for that. So as a result unions have to have a method by which to ensure that there is some ability to ensure that everyone in the workplace has some skin in the game. For union members this is where union dues come in. For non-union members this is where "fair share" provisions come in. These monies are part of what allow the union to continue to exist and have the wherewithal to fight back against management overreach, whether that is in court or simply by organization and communication among workers.

"Right to work" legislation strips unions of the ability to obtain monies from people in a shop where there is a union. This sounds good no? It's expanding the worker's choice no?

Not really. This means that everyone, union worker or not, then has a MASSIVE incentive to withhold dues or fair share provisions because they get the benefits of union representations without the costs. Over time the union can't economically function with all the free riders and can't legally or politically function with smaller and smaller membership. So goodbye union. In other arenas people understand the free rider problem.

This is no different from giving someone like me the option to withhold taxes from the US government because I am bitterly and profoundly opposed to its foreign policy. I have no intention of leaving the US and going to live in another country. I just don't want to pay taxes. If everyone did that the US could not continue to exist. Now unions aren't nation states but the concept is exactly the same.

Do "right to work" states have better economic outcomes as companies that were avoiding the state because of grasping, overreaching unions, come flooding into the state?

The evidence seems to say no those "right to work" states aren't better off. "Right to work" states are associated with lower income and higher numbers of uninsured people. If you want a low wage state with fewer worker protections, then by all means support "right to work" legislation.

And this soon to be law can't be overturned by referendum because the Republicans were smart enough to add appropriations to the bill. Under Michigan's constitution, doing that means that the law is not subject to referendum of the people. Assuming that Governor Snyder signs the legislation, the only way to overturn it would be to replace Snyder and a sizable number of Republicans in 2014. So we're living in interesting times in Michigan.

Questions

1) Do you support Right to Work legislation?

2) Do you live in a Right to Work State?

3) If Snyder signs the bills, what should the response of the labor movement be?

Michigan Cuts Welfare: 11,000 Families Lose Benefits!

Michigan Republicans to welfare recipients: 

Elections have consequences. That is something that people who won the last election like to smugly say to people who lost the last election. This is nowhere more true than in Michigan since the recent election of Republican Governor Rick Snyder, former chairman/coo/president of Gateway, who with the assistance of a Republican majority in the legislature, has instituted some sweeping changes.
The latest change is that there will be an end to cash assistance welfare for families who have received more than four years of help. This starts October 1-just as school is starting up and winter is coming.

Lansing— The state Legislature on Wednesday passed a 48-month lifetime limit on welfare benefits expected to cast more than 11,000 families off the welfare rolls on Oct. 1 — including more than 29,700 children, according to state officials.The cumulative time limit will save $77.4 million in the budget year that starts Oct. 1, but Democrats and child advocates said they fear it will cause a humanitarian crisis as social agencies are flooded with families who can't pay for rent, utilities or other essentials.

Gov. Rick Snyder, who proposed the cap as part of his 2012 budget, is expected to sign the bill into law.

Judy Putnam, spokeswoman for the Michigan League for Human Services, said: "The impact is going to come … when families lose a key source of income and may not be able to pay the rent just as the school year is getting started and kids are settling into classrooms."She added that many nonprofits and charities also have been slammed by the recession.

Wayne County will be most affected, with 6,560 families losing the cash assistance. Genesee County will see 1,533 families come off the rolls, with 600 in Muskegon, 385 in Oakland and 371 in Saginaw.

Statewide, 11,188 adults and 29,707 children will lose their benefits in just over five weeks. By September 2012, there will be 13,789 families to drop off the rolls, said Sheryl Thompson, acting deputy director of field operations for the Department of Human Services.

Thompson was not able to give a breakdown of adults and children by county, but she said the average family includes one adult and two children. DHS Director Maura Corrigan announced earlier this month that the agency would no longer grant extensions to clients who have exceeded the five-year federal limit on cash assistance. Thompson said most of the families who will lose their benefits Oct. 1 have been on the rolls five years or longer.

Republicans said Michigan no longer can afford to allow families to stay on the assistance plan for four years or more. Rep. Kenneth Horn, R-Frankenmuth, noted that food stamps, Medicaid and child care payments will continue for those kicked off cash assistance. "This should be a strong statement for Michigan residents that (cash assistance) should not be a lifestyle," Horn told members of the House before Wednesday's vote. The measure passed largely along party lines in both chambers. Link to Detroit News Article

Now I was prepared to be exceedingly wroth but upon reading the article and doing some more research I learned that the current federal lifetime limit on welfare cash assistance is just five years. States are allowed to exempt up to 20% of their case load for hardship reasons, which Michigan announced it would no longer do. So perhaps moving from five years to four years is no big deal? Perhaps.

However Snyder and his merry band of right-wingers also just recently overhauled the Michigan budget and tax structure. I don't intend to dive down into the nuts and bolts right now but the big picture is that pensions are now taxable, the limit for state unemployment payments was reduced, the Earned Income Tax Credit was cut, business taxes were cut and aid to schools was cut. The only problem is that in the real world where states have to balance their budget, cutting taxes leads to less revenue coming in and that has to be made up somehow. How fortunate then for the Republicans that the amount of money they expect to save from the welfare cuts happens to be the exact amount of the probable budget shortfall from the tax cuts.

What an INCREDIBLE coincidence!!!!!! 

Poverty, Schmoverty! Look at the big picture people!!!

Although it's not national news the way something would be if it were happening in California or New York, the ugly truth is that Michigan has a very serious problem with child poverty. It's risen 64% over the past decade. 

That's right 64%!!! That's a lot of children living in homes with impoverished parents-a lot of people working low pay dead end jobs or unable to find jobs.

More than 36 percent of all Michigan children younger than age 18 were living in a household in 2009 where no parent had full-time, year-round employment, according to the Annie E. Casey Foundation’s annual Kids Count Data Book released today. That compares with 31 percent of children nationally. The report also found that 12 percent or 281,000 children in Michigan had at least one unemployed parent in 2010 compared with 11 percent nationally. And 5 percent of Michigan kids were affected by foreclosures since 2007, compared with 4 percent nationally.
“This report shows with startling clarity how deeply the recession has affected families across Michigan,’’ said Jane Zehnder-Merrell, director of the Kids Count in Michigan project at the Michigan League for Human Services. “Unemployment and foreclosures are adult issues but ones that dramatically affect kids, too. These economic stressors place children at much higher risk of worsening health and education outcomes.”
Some 23 percent of Michigan children lived in poverty last year -- with poverty calculated as two adults and two children living on $21,756 or less, up 64 percent since 2000.

With the news that the Federal COBRA subsidy is ending I guess now would be a particularly bad time to be unemployed in Michigan. The other thing to consider is not only will these welfare cuts hurt some undeserving people but that increasing the labor supply at a time when there is already 9% unemployment is not going to have a particularly good impact on wages. Of course that's if you're an employee. If you're an employer this is good news because your leverage over your current (low-skill) workers just got a little tighter. Don't like your job? Shut up and grin or I'll replace you with a welfare recipient. There is an effort to recall Snyder (it was started well before this latest news) but it doesn't look like it will go anywhere.


Of course to be fair there IS another side to this issue. I don't have much sympathy for it BUT at one point we didn't have federal cash assistance for impoverished people.  A four year lifetime limit is pretty long. If you can't afford kids don't have them. You have no right to other people's money. Some people need a kick in the butt to get them moving. Quit hiding behind your kids and get your tuckus to work. We heard the same doom and gloom predictions when Clinton made changes during the nineties so quit your squawking and get a job.


I have to admit I know some people to whom I would have no problem preaching that last paragraph. But are they the majority of welfare recipients? I don't think so. Not at all.


QUESTIONS:
What's your take?
Is a 4 year lifetime welfare limit too stringent?
Should this wait until there is lower unemployment?
Should this be phased in over a few years?
Is this the morally right thing to do?